The purpose of narrative writing is to entertain or inform.

How does a narrative entertain? We create a world that the reader or listener can enter.

This world might be some completely imaginary place with unusual and unrealistic creatures. We call these narratives: fantasty, science fiction, fables, fairy tales.
This world might be one that may have existed some time in the past which explain a phenomena from a non scientific point of view. We call these myths and legends.
The world might be a real one, with realistic places and people. Or it might be a blend of imaginary and realistic. We might call these mystery, horror, action, adventure.